As I mentioned last week, it was just a matter or time until the oversold condition of the market was corrected. I probably should have paid more attention to the extreme position of one of my sentiment indicators but the overall picture remains the same. My earnings indicators show one bearish and the other just barely hanging on to neutral. Valuation remains neutral and sentiment is still positive but not extremely so after last week's rally. My Elliott Wave buddies tell me that we are in minor wave two now - to be followed by a disaster known as wave three down. If earnings don't improve, I'm afraid they could be right. My model is still very cautious and calls for zero exposure or a modest short position.